For tomorrow you pay your care home fees.
I don't want to sound like a cynical, grasping relative watching an inheritance go down the plug hole but if we've learnt one lesson about growing old and needing care in the last few months it's that the state doesn't reward the thrifty. If you are into old age and you have saved a few quid instead of spending it on booze, cigarettes and holidays in the sun, you aren't going to get any help with your care home fees. The only benefit Flo has from squirreling away her pension week after week is that she at least has the opportunity to choose where she stays rather than take what the local authority gives her and I suppose that we should be grateful for that small mercy as she is in a place with a nice atmosphere.
But it won't take long to erode away her small nest egg. You are allowed to have £23,000 left when the state steps in. Anybody who owns a house or flat is likely to have more than that but you've got to sell that to get the cash to pay the fees and it's not exactly a sellers' market at the moment is it? So you sell at a knock down price with the attitude that it doesn't really matter as it's all going to go until that £23k figure is reached. And it won't take that long. Care home fees around here start at about £400 per week and go up so that a bill of £25,000 a year is not unusual. If Flo went back to her roots in Richmond (which she would like) that would escalate to almost £50,000 so it would not be very long before she called on the state for help and (after watching some TV news items recently) God knows what sort of place they might find for her down there.
So if you are getting on in years it makes sense to start getting rid of your savings now if you have any. Treat yourself to that car or holiday you always promised yourself but didn't get around to. Splash out on the family Christmas presents and support your favourite charity. Give money to your grandchildren or put it in trust for them to have when they go to university. All those bequests in your will? Give them now. It's just not worth keeping it.
OK so that may be a jaundiced view and you may well think that everyone should pay for their own care if they need it. And I would agree with you to a point but it just seems that if two pensioners start at exactly the same financial position and one blows the lot and the other is very careful it seems unfair that the profligate is rewarded whilst the careful pays the price.
And yes I will be putting my money where my mouth is. The give away will start next year.